128 pages. "This document contains a revised proposed rule that would clarify the term 'adequate consideration' as set forth in section 3(18)(B) of [ERISA] and govern the fiduciary determination of fair market value in connection with certain [ESOP] transactions involving employer stock. If its conditions are satisfied, section 408(e) of ERISA permits an ESOP to engage in transactions involving qualifying employer securities, including employer stock, that would otherwise be prohibited by section 406 of ERISA.... This document also withdraws a prior proposed regulation published in 1988 that addressed similar subject matter."  MORE >>

70 pages. "This proposed exemption would provide relief ... to the following parties involved in an ESOP's initial acquisition of non-publicly traded employer common stock from a Selling Shareholder: selling shareholders, any trustee that is independent of the Employer and represents the interests of the ESOP in the transaction, any appraiser that is independent of the Employer and represents the interests of the ESOP in the transaction, and any fiduciary of the ESOP with authority to hire, monitor, or fire the Independent Trustee. The proposed exemptive relief ... is subject to protective conditions that are designed to ensure that any transaction relying on the exemption is prudent and based on a reliable appraisal of the stock's fair market value."  MORE >>

"The notice of proposed rulemaking released today ... takes a principles-based approach in setting out a fiduciary framework for employer stock valuation and proper use and development of appraisals, without purporting to specify precise valuation methods and methodologies. It reflects principles expressed in numerous court decisions and important elements from the Department's process agreements. market value' and a 'good faith' determination of that value."  MORE >>

"[L]ate participant deferrals account for approximately 95% of the VFCP corrections [the authors] prepare for employers and plan sponsors.... The new self-correction option is expected to streamline the process for this common error. While the updated guidance is now available, the self-correction component will not be available until March 17, 2025."  MORE >>

"[A]lthough the regulations are not proposed to be applicable until after the final regulations are published, they do not include a further delay in the enforcement of the Roth catch-up mandate. Thus, plan sponsors should be prepared to implement this mandate in 2026 after the two-year administrative relief period provided for in Notice 2023-62 expires."  MORE >>

"[T]he Proposed Regulations only permit an employer subject to mandatory automatic enrollment to exclude participants with an affirmative election to defer or not to defer from the automatic enrollment. No classes of employees otherwise eligible to make a deferral election may be excluded from the automatic enrollment, which means that long-term part-time employees must be subject to the automatic enrollment feature."  MORE >>

"The new and 'improved' (there are those quotes again) VFCP leaves little ambiguity with respect to loan errors that are self-corrected via EPCRS. To obtain DOL relief, a plan fiduciary must now use DOL's new online web portal to submit information about the correction. To be clear, the information to be submitted isn't especially onerous; however, compiling the required supporting documentation is pretty much just as time-consuming as preparing a full-blown approval application."  MORE >>

"[It] was not clear whether an 'old' single employer plan that joined a 'new' (post-enactment) PEP would be considered a new plan or an old plan. In fact, the IRS had issued some guidance that strongly suggested that it would be considered a new plan -- which would mean that it would need to automatically enroll its eligible participants. The IRS has just issued a proposed regulation on the SECURE 2.0 provision on automatic enrollment. The proposal provides that the 'old' plan would continue to be considered an 'old' plan even after joining a 'new' PEP."  MORE >>

"Plan sponsors may wish to conduct greater diligence and monitoring of investment managers' use of ESG and other collateral considerations in conducting business that impacts retirement plans.... ERISA plan fiduciaries that delegate proxy voting authority to their managers under the terms of their IMAs [may see] additional focus going forward on their monitoring and scrutiny of the voting activities of their managers.... Prudence is process: lessons for surviving a claim alleging breach of the duty of prudence.... The 2022 ESG rule remains in effect (for now)." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Jan. 10, 2025)]  MORE >>

"[Plaintiffs] alleged ERISA violations related to an ESOP transaction and relied on a common interest agreement with the DOL to obtain DOL investigative materials ... The District Court affirmed [the Magistrate Judge's] ruling, concluding that the plaintiffs and the DOL lacked a shared legal strategy and ordering the production of the DOL interview reports within five days.... [T]he DOL chose not to object to the [Magistrate Judge's] ruling. The court described this silence as both dispositive and 'somewhat telling,' given that the disputed work product belonged to the DOL." [Harrison v. Envision Mgmt. Holding, Inc. Board of Directors, No. 21-0304 (D. Colo. Jan. 13, 2025)]  MORE >>

"Rehired employees present challenges to employers with company-sponsored retirement plans.... [M]any 401(k) plans include minimum service requirements or vesting schedules on employer contributions, which complicate the analysis. In addition, the automatic enrollment mandate for non-grandfathered plans which became effective January 1, 2025 makes the treatment of rehires even trickier."  MORE >>

" 'Complexity' here seems to be more about the disconcerting demands required when unfamiliar 'de-cumulation' programs are introduced into a market founded on accumulation. It's all about the learning curve on how to use the rules with which we are all familiar to an unfamiliar set of facts."  MORE >>

"[As] the RIA business gets bigger, and its clientele spans a wider wealth spectrum, it is also becoming clear that some RIAs are harming their practices, hence their clients, by misinterpreting their precise legal duties."  MORE >>

"The proposed regulations would provide that, for purposes of determining whether under new Sec. 162(m)(3)(C) an employee is one of the five highest-compensated employees, the term 'employee' means an 'employee' as defined in Sec. 3401(c), which includes a common law employee and an officer of a corporation. The proposed regulations would define compensation as compensation that would (but for Sec. 162(m)) be allowable as a deduction."  MORE >>